According to TSX statistics TransGlobe Energy Corporation (TSX:TGL) had a significant amount of shares sold short (i.e. when seller borrows the shares sold) during the period of time noted. As at December 31, 2013, outstanding short sold shares of TGL represented ~19% of the TGL public float. This percentage decreased to less than 2% as at May 31, 2014.

Observations:
• Of the Top 20 companies short sold the percentage sold short range from ~9% to ~23%
• The 20 companies have market capitalizations that range from C$0.2 billion to C$3.9 billion
• 19 of 20 do not pay dividends

Conclusion:
• Management researched the short position and believes the majority of the short position on TGL was created through derivative forward agreements
• Derivative Forward Arrangements are structured to give investors capital gains tax advantages on fixed income investments
• These structures do not work well for companies which pay dividends, which is why TGL’s short position has decreased dramatically since the initiation of a dividend in May 2014
• These trades occur without any involvement or knowledge of TransGlobe

A: TransGlobe’s oil production is benchmarked against Dated Brent prices. Brent is the widely used North Sea benchmark light (38º API), sweet crude oil and Dated Brent is a type of spot sales contract that has been priced with a known loading date. In general, the Company’s oil produced in Egypt is sold at a discount of 9 to 23 percent to Dated Brent.

A: In Egypt, TransGlobe holds a 100 percent working interest and operates all its concessions in Egypt (West Gharib, West Bakr, South East Gharib, North West Gharib, South West Gharib, South Ghazalat, North West Sitra and South Alamein).

A: The Company’s reserves are reviewed annually – as is customary in the oil and natural gas industry – following the conclusion of the fiscal year, which is also the calendar year. All of TransGlobe’s reserves were independently evaluated by a third-party engineering firm, DeGolyer and MacNaughton, headquartered in Dallas, Texas. The independent year-end reserve report is commissioned, reviewed and approved by the Company's Reserves Committee.

As at December 31, 2014, TransGlobe had a total of 33.5 million barrels of Proved plus Probable reserves.